Microsoft CEO Says Xbox Will ‘Return To Growth’ This Fiscal Year

Microsoft’s chief executive, Satya Nadella, seldom highlights Xbox during the quarterly earnings briefings he leads. Investors rarely probe the console division, and the discussion has shifted almost entirely toward the company’s booming artificial‑intelligence ventures.

When Nadella does touch on Xbox, it is almost always a brief, upbeat nod—perhaps a quick mention of a new launch or a Game Pass subscriber milestone—to reassure stakeholders that the platform remains active and profitable.

Today’s brief reference to Xbox, however, felt unexpectedly muted. The CEO offered a vague, cautious outlook that was noticeably more restrained than his usual upbeat tone.

He alluded to recent turmoil, citing the dismissal of roughly 1,600 employees, the anticipation of another 1,600 cuts, and the divestiture of four—or possibly five—of its internal studios. Nadella framed these moves as “necessary decisions…to reset the business for long‑term growth,” echoing the narrative previously articulated by Asha Sharma.

“When it comes to Xbox, we are making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long‑term growth,” he said. “We have the best IP in the industry and talented studios around the world, and believe we can bring these strengths together, and expect to return the business to growth in fiscal 2027.”

Nadella’s recent remarks were comprehensive yet deliberately vague, offering no concrete definition for the promised “return to growth.” The only figure released was a 3 % profit margin for the Xbox division, a sign of profitability but not of expansion, and recent data suggests the console has been on a downward trajectory for some time.

In contrast, last year’s commentary from Nadella was unusually detailed, painting Xbox in a positive light without hinting at any problems.

He highlighted 500 million monthly active users across platforms, claimed the division topped both Xbox and PlayStation in the quarter, cited the triumphant launches of Forza Horizon 5 and Oblivion Remastered, praised the Call of Duty franchise with 50 million players of Black Ops 6 and over 2 billion total hours, celebrated Minecraft’s record monthly activity and revenue buoyed by the film, mentioned nearly 40 titles in development, noted over 500 million hours streamed via the cloud, and announced Game Pass annual revenue nearing $5 billion.

Microsoft announced a record fiscal year, topping $331 billion in revenue, yet the company simultaneously executed significant layoffs across the organization.